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[align=right]Vladimir Filonov / MT[/align]
Analysts said the Holiday Inn will be the first branch of an international hotel franchise in Moscow with a local managing company.[/align]
With the opening of Holiday Inn Moscow Lesnaya next week, the city will finally get a branch of what could be the world's most recognizable hotel brand.[/align]
The 12-story hotel, located on Lesnaya Ulitsa near Belorussky Station in central Moscow, features large conference facilities as well as 301 rooms, including 17 suites. It is the first international-brand hotel to appear in the city since the fall 2002 opening of the Ararat Park Hyatt.
The hotel will be owned by Mospromstroi and managed by a Mospromstroi subsidiary.
Total investment has not been announced, but market watchers estimated it could have been anywhere between $30 million and $40 million.
"This is the first example in Moscow of international franchise agreement with a local Russian representative," said Rob Stoddard, vice president at Monab Development.
Marina Usenko, vice president at Jones Lang LaSalle Hotels, agreed, calling Holiday Inn's management agreement "not very typical for Moscow."
Russia's first -- and, until now, only -- Holiday Inn opened in late 1998 on a 3.5-hectare site in Vinogradovo, five kilometers north of Moscow. However, the 154-room hotel is managed by Britain's Intercontinental Hotels Group, which owns the rights to the Holiday Inn brand, and not by a Russian company.
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Ad Table III: script: AdH pagead2Two more hotels to appear in Russia soon -- a 178-room property in central Samara, scheduled for a September 2005 opening, and northeastern Moscow's 512-room Holiday Inn Sokolniki, slated to open by mid-2006 -- will also be managed by Intercontinental, according to Markku Wahlberg, general manager at the Holiday Inn Vinogradovo.
But Mospromstroi is planning to open a 312-room Holiday Inn on Ulitsa Sushchevsky Val in downtown Moscow in early 2006, which it will also manage.
"It will be interesting to see how two Holiday Inn management companies will be competing," Stoddard said.
The Holiday Inn Moscow Lesnaya is the largest hotel to appear in the city since the opening of the 386-room Marriott Grand nearly a decade ago. However, it will do very little to satiate the growing demand for quality accommodation, market experts said.
"It seems that in Moscow right now, hotels have the benefit of good demand," said George Chauve, managing director at the Holiday Inn Moscow Lesnaya, which will welcome its first guests on March 8.
Moscow is experiencing a shortage of midrange accommodation, which is negatively affecting the city's attractiveness to tourists, according to both City Hall officials and hospitality experts. Driven by a lack of rooms and growing demand, occupancy rates have been rising along with room rates for several years and are currently at an all-time high.
Chauve predicted that the Holiday Inn, with its rack rates of $250 per night -- on a par with competitors such as the Novotel City Center -- would be able to achieve an occupancy rate of 60 percent in its first year and would reach the citywide level of 80 percent in its second.
"I don't think they'll have any problems selling rooms," Stoddard agreed. "It is a good location, as well -- close to the Marriott Tverskaya, which last year recorded the highest occupancy of any hotel in Moscow, 88 percent."
